MEV-Boost

The core architectural principle enabling MEV-Boost. It decouples the role of the block proposer (validator) from the block builder (specialized entity). This separation allows:

• Proposers to focus on consensus duties.
• Builders to compete in an open market to construct the most profitable blocks.
• Increased decentralization by preventing a single entity from monopolizing MEV extraction.

A critical, trusted intermediary in the MEV-Boost flow. Relays perform essential functions:

• Receive blocks from builders and validate their contents (e.g., proof-of-execution).
• Maintain a censorship-resistant list of available blocks for proposers.
• Forward the selected block header to the proposer, who then signs it.
• Major relays include Flashbots, BloXroute, and Agnostic.

A competitive auction where specialized block builders construct and bid for block space. Builders:

• Aggregate transactions and MEV opportunities (e.g., arbitrage, liquidations).
• Create an optimized block that maximizes total value (transaction fees + MEV).
• Submit their block and a bid (payment to the proposer) to relays.
• The builder with the highest valid bid typically wins the auction.

The step-by-step process for a single slot:

1. Builders create blocks and submit them with bids to Relays.
2. Relays validate blocks and present the highest-bid header to the Proposer.
3. Proposer selects a header, signs it, and returns the signature to the relay.
4. Relay delivers the full block body to the proposer for attestation.
5. Proposer publishes the full, signed block to the network.

A cryptographic mechanism ensuring the proposer cannot steal the builder's transactions. The process involves:

• The builder sends only the block header (a commitment) to the proposer initially.
• The proposer commits to this header by signing it without seeing the full block body.
• Only after this commitment does the relay reveal the full block body, preventing theft of the profitable transaction order.

How validators interact with MEV-Boost. Validators run their consensus client (e.g., Lighthouse, Prysm) alongside the MEV-Boost software. Key integration points:

• The consensus client is configured to connect to one or more relay URLs.
• When chosen to propose a block, the client requests a block header from MEV-Boost.
• MEV-Boost queries its connected relays and forwards the most profitable header.
• This allows validators to capture MEV rewards without complex infrastructure.

MEV-Boost is a practical implementation of Proposer-Builder Separation (PBS), a design pattern that decouples the roles in block production.

• Proposer (Validator): Selects the most profitable block header, attests to it, and collects the payment.
• Builder: Assembles the block's contents and determines transaction ordering. This separation mitigates centralization risks by allowing validators with modest resources to access sophisticated block building, reducing the advantage of large, integrated staking pools.

The MEV-Boost auction is a sealed-bid, first-price auction that runs every slot (12 seconds). The process is:

1. Build: Builders create blocks and submit them with bids to relays.
2. Bid: The validator's MEV-Boost client receives available block headers and associated bids from connected relays.
3. Choose: The validator selects the header with the highest bid.
4. Propose & Reveal: The validator proposes the chosen header. The winning relay then reveals the corresponding full block body to the network.

A key critique of MEV-Boost is its potential for transaction censorship, as relays can filter which transactions builders include. Current solutions include:

• Inclusion Lists: A protocol-level feature where the proposer can force specific transactions into the next block.
• Enshrined PBS (ePBS): A long-term Ethereum protocol upgrade to bake PBS directly into the consensus layer, reducing reliance on off-chain, trust-based relays and enhancing neutrality.

A relayer is a trusted intermediary that receives blocks from builders and forwards them to proposers. Proposers must trust that the relayer will:

• Honestly forward the highest-bid block header.
• Censor-resistance: Not withhold blocks based on content.
• Availability: Deliver the full block body after a commitment. A malicious relayer could cause a proposer to miss their slot or propose an invalid block.

Block builders are specialized entities that construct full blocks to maximize MEV. The trust model includes:

• Execution integrity: The builder must produce a valid block that matches the promised header.
• Centralization risks: The market is dominated by a few professional builders, creating systemic risk if they collude or fail.
• Builder censorship: A dominant builder could exclude certain transactions, threatening network neutrality.

This is the core architectural principle behind MEV-Boost. It separates the roles of consensus (proposing) and execution (building) to:

• Protect validators from MEV-related complexity and risk.
• Reduce the incentive for validator centralization around MEV capture.
• Create a competitive market for block building. However, it shifts trust from the consensus layer to the builder market.

A critical security requirement is that the full block data is available after a header is proposed. MEV-Boost uses a commit-reveal scheme:

• The proposer commits to a block header without seeing the full contents.
• They must trust the builder will reveal the block body.
• If the data is withheld, the block is invalid, causing the proposer to lose rewards. This reliance is a key weak trust assumption.

The long-term solution to MEV-Boost's trust model is enshrined Proposer-Builder Separation (ePBS), a protocol-level upgrade to Ethereum. It aims to:

• Eliminate trust in relayers by moving the auction mechanism on-chain.
• Formalize builder commitments with cryptographic guarantees and slashing conditions.
• Minimize extra-protocol trust, making the system more secure and decentralized.

Validators using MEV-Boost must manage new risks:

• Software diversity: Reliance on a few dominant relay clients creates fragility.
• Out-of-protocol promises: Rewards are paid via a separate transaction, not by the protocol, requiring trust.
• Timing attacks: Malicious builders could deliver blocks late, causing missed slots.
• Regulatory exposure: Validators may be implicated in MEV extraction strategies they did not design.

The architectural principle that MEV-Boost implements. It decouples the roles of block proposer (validators) and block builder (specialized entities), allowing validators to outsource block construction to a competitive marketplace. This separation aims to democratize access to MEV profits and reduce the centralization risks of validators running complex, resource-intensive MEV strategies themselves.

Specialized entities that compete to construct the most profitable blocks for validators. They:

• Aggregate transactions from users and searchers.
• Simulate and optimize transaction ordering to maximize MEV (e.g., arbitrage, liquidations).
• Submit complete block bids to relays, offering a payment (the bid) to the validator who selects their block. Builders profit from the difference between the MEV they capture and their bid.

Trusted intermediaries that facilitate the PBS marketplace. Their critical functions include:

• Receiving block bids from multiple builders.
• Validating block contents (e.g., execution payload, proof-of-custody) to ensure they are valid and comply with data availability rules.
• Forwarding the highest bid and its associated block header to the proposer. Relays are trusted not to censor transactions or steal MEV, making their operation and decentralization a key security consideration.

Independent agents or bots that identify and execute profitable MEV opportunities on-chain. They:

• Run algorithms to detect arbitrage, liquidations, or other profitable transaction sequences.
• Bundle their transactions and submit them to builders or directly to block builders via a block builder API.
• Pay fees (often via priority gas auctions) to have their bundles included in a block. Searchers are the primary source of the raw MEV that builders aggregate.

Future Ethereum upgrades aimed at mitigating MEV centralization. MEV Burn proposes to destroy a portion of extracted MEV (e.g., via base fee increases), reducing the economic incentive for extreme specialization. PBS at Consensus (or enshrined PBS) seeks to formalize the proposer-builder separation within the Ethereum protocol itself, removing the need for trusted relays and making the auction mechanism more censorship-resistant and decentralized.